The 33-year-old fast bowler won a court battle in July to temporarily suspend an 18-month ban for disciplinary problems, but a fine of seven million rupees (93,000 dollars) was upheld.
"Since the court maintained the fine, the PCB cannot allow him to play for Pakistan as it would be tantamount to flouting the ruling of the court," PCB legal adviser Taffazul Rizvi told AFP.
He did not say why Akhtar was initially named in the squad.
The PCB's chief operating officer, Shafqat Naghmi, had announced on Tuesday that Akhtar could play without paying the fine.
"His lawyer has argued that Akhtar can pay the fine once the appeal against the reduced ban is heard in the court, so we have decided to keep the legal matter and cricket separate," Naghmi had said.
An original five-year ban, imposed in April for criticising the PCB's failure to award him a central contract, was reduced by an appeals commission to 18 months but the commission also imposed the fine.
Akhtar has refused to pay the fine while he waits for the court to rule on whether it will overturn the ban. The court is likely to hear the case next month.
Akhtar, who has not played for Pakistan this year, impressed in recent trial matches to stage a comeback.
Pakistan stages the eight-nation Champions trophy from September 12-28 but the run-up to the event has been clouded by security concerns raised by players from Australia, England, New Zealand and South Africa.